OTTAWA (Reuters) – Canadian Telesat rushes to launch a low-Earth (LEO) satellite constellation to deliver high-speed broadband from space, pitting the satellite communications firm founded in 1969 against two pioneering billionaires, Elon Musk and Jeff Bezos , set .
Musk, the CEO of Tesla Inc, which was just a year old when Telesat launched its first satellite, puts the so-called Starlink LEO in orbit with its company SpaceX, and Amazon.com Inc, which founded Bezos, plans A LEO called Project Kuiper. Bezos also owns Blue Origin, which builds rockets.
Despite the competition, Telesat CEO Dan Goldberg expresses confidence when he calls Telesat’s LEO constellation ‘the Holy Grail’ for its shareholders – ‘a sustainable competitive advantage in global broadband delivery.’
Telesat’s LEO has a much lighter price than SpaceX’s and Amazon’s, and the company has been in satellite services for decades. Instead of concentrating on the consumer market like SpaceX and Amazon, Telesat is also looking for deep business customers.
Goldberg said he literally fell asleep six years ago when he realized the company’s business model was in jeopardy because Netflix and video streaming started quickly, guaranteeing the fiber optic lightning-fast Internet connection.
Telesat’s 15 geostationary (GEO) satellites mainly provide services to TV broadcasters, internet service providers and government networks, all of which have become increasingly concerned about the delay or time delay of reflective signals from orbits over 35,000 km (22,200 miles) above. earth.
On a flight home from a Paris conference in Paris where the delay was a constant theme in 2015, Goldberg writes his initial ideas for a LEO constellation on an Air Canada napkin.
These ideas eventually led to Telesat’s LEO constellation, called Lightspeed, which would orbit about 35 times closer to Earth than GEO satellites, providing internet connections at speeds such as fiber optics.
Telesat’s first launch is planned for early 2023, while there are already about 1,200 of Musk’s Starlink satellites in orbit.
“Starlink is going to be in service very soon … and that’s giving SpaceX the opportunity to win customers,” said Caleb Henry, a senior analyst at Quilty Analytics.
Starlink’s advantage of ‘first mover’ is a maximum of 24 months and ‘no one is going to lock up the whole market in that time,’ Goldberg said.
In 2019, Telesat signed a launch agreement with Bezos’ airline Blue Origin. Three other talks are underway, says David Wendling, Telesat’s chief technology officer.
It’s Japan’s Mitsubishi Heavy Industries Ltd, the ArianeGroup in Europe and Musk’s SpaceX, launching the Starlink satellites. Wendling said a decision would be made within a few months.
Telesat aims to launch its first group of 298 satellites built by Thales Alenia Space in early 2023, with later that year partial service at higher latitudes and in 2024 full world service.
‘SWEET SPOT’
The Lightspeed constellation is estimated to cost half as much as the $ 10 billion SpaceX and Amazon projects.
“We think we’re in the right place,” Goldberg said. “When we look at some of these other constellations, we do not understand them.”
Analyst Henry says Telesat’s focus on business customers is the right one.
“You have two heavyweight players, SpaceX and Amazon, who have already pledged to spend $ 10 billion on satellite constellations optimized for the consumer market,” he said. “If Telesat can spend half the amount to create a high-performance enterprise system, then it’s very competitive.”
Telesat’s operating experience can also provide an edge.
“We’ve been working with many of these customers for decades … It’s going to give us a real advantage,” Goldberg said.
Telesat ‘is a satellite operator, was a satellite operator and has the benefit of expertise and experience in the business,’ says Carissa Christensen, CEO of research firm BryceTech, adding, however, that she only sees two LEO constellations. survive.
Telesat is financing financing – one-third equity debt and two-thirds debt – and will be traded on the Nasdaq Stock Exchange sometime this summer, after which it may also list on the Toronto Stock Exchange. At present, Canada’s Public Sector Pension Investment Board and Loral Space & Communications Inc. are the major shareholders of the company.
France and Canada’s export credit agencies, BPI and EDC respectively, are expected to be the main lenders, Goldberg said. The provincial government of Quebec has borrowed C $ 400 million ($ 317 million), and the federal government of Canada has promised C $ 600 million to be a preferred client. The company also achieved C $ 246 million in net income in 2020.
The implementation of the LEO plan now stops Goldberg at night, he said.
“When we decided to go down this path, the two richest people in the universe were not focused on their own LEO constellations.”
($ 1 = 1.2622 Canadian dollars)
Reporting by Steve Scherer in Ottawa; Edited by Matthew Lewis